BP Suspended From New Federal Contracts

US Bans BP From New Government Contracts, For Now

The US has banned BP from any new federal contracts on Wednesday, citing a “lack of business integrity” in the 2012 Deepwater Horizon oil spill.

The move by the country will likely cause the company to drop from the list of top US offshore oil and gas producers, as well as its place as the number one military fuel supplier, reports Reuters.

The suspension was announced by the Environmental Protection Agency (EPA) and comes directly after BP agreed on November 15 to plead guilty to criminal misconduct in the Gulf of Mexico disaster, which was the worst offshore oil spill in US history.

The energy giant agreed to pay a record $1.256 billion in criminal fines as part of the $4.5 billion in penalties it now owes the US government. BP and all of its affiliates will be barred from any new federal contracts until they are able to prove that they can meet federal business standards.

The EPA added that the ban is “standard practice,” and that the company’s existing US government contracts will not be affected. USA Today notes that suspensions typically last up to one year.

Companies often hire an outside firm to help improve their ethics program, their ability to conduct internal investigations, and also the company’s ability to communicate with the government.

BP made a statement on Wednesday that stated they already provided the EPA with a 100-page argument that shows it is now a responsible company. The report details the steps the company took after the oil rig explosion, including an internal investigation that took place immediately after the accident happened.

The report released the results of the investigation, how they are implementing the investigation’s recommendations, how they have made leadership changes, and how they have adopted voluntary deepwater drilling standards in the Gulf of Mexico that exceed the required regulations.

BP stated that is has already heard back from the EPA, and that the agency “is preparing a proposed administrative agreement that, if agreed upon, would effectively resolve and life this temporary suspension. The EPA notified BP that such a draft agreement would be available soon.”